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YouTube planning subscription music service… again

By | Published on Friday 8 December 2017


YouTube is plotting a standalone subscription music service. Yes, again. What could possibly go wrong with that? The new product, which is pencilled in for a March 2018 launch, has the internal working title of ‘If We Launch This Nonsense Will You All Fucking Shut Up About The Value Gap?’ Or ‘Remix’ for short. Which doesn’t really work does it? Either as an acronym for my made-up full name or as brand for a generic streaming music service.

We’ve been down this path before, of course. Back in 2014 the Google site unveiled YouTube Music Key. Coincidentally, that was just as the music industry decided that YouTube was no longer a useful platform for plugging music and driving iTunes sales – all while getting a little ad income to boot – but was instead the under-paying copyright-loophole-exploiting pain in the arse fucking up the then emerging premium streaming business.

Music Key was going to be a new subscription-based music streaming service tapping content from and being heavily promoted by the wider YouTube platform. It would ensure that the freeloaders using the video site as their primary music source would be turned into paying subscribers generating decent money for the music industry. And it would also allow Google to enter the about-to-boom streaming music market. Which it already had, of course, with the Google Play streaming service, but everyone had forgotten that existed.

There was plenty of chit chat about how Music Key would work, what extra flim flam it would offer in order to persuade YouTube’s freebie music streamers to start paying, and how it would differ from Spotify et al. And there were meetings and presentations and beta testings and all sorts of product development shenanigans.

So many meetings and presentations and beta testings and product development shenanigans, in fact, that YouTube got bored with the whole Music Key project, and shunned it in favour of launching a subscription version of its entire video platform. That being YouTube Red, of course. Which still exists in some markets. I even met someone who had signed up for it once.

Since then the music industry has ramped up its rhetoric about YouTube being the “under-paying copyright-loophole-exploiting pain in the arse fucking up the premium streaming business”. The alleged copyright-loophole allows YouTube to pay much lower royalties than other streaming platforms, it says, hence the ‘value gap’.

The music industry now wants that alleged copyright loophole closed. Which, is to say, it is calling for the infamous copyright safe harbour, that protects internet companies when their users upload copyright infringing material, to be revised so to no longer protect services like YouTube.

In response, Google hired record industry veteran Lyor Cohen to try to placate the music industry. Earlier this year he wrote about all the exciting things YouTube was doing in music, basically telling his former colleagues that they should stop waffling on about ‘safe harbour’ and the ‘value gap’, and instead focus on all the many marvellous opportunities ahead. Those former colleagues all quickly responding with lengthy blog posts that could be summarised as follows: “We love you Lyor, but fuck off”.

Having not fucked off, Cohen has since been bigging up the potential of YouTube Red, for music as well as other video creators, while also talking about YouTube Music and the aforementioned Google Play Music becoming more closely aligned, initially behind the scenes, but – he heavily implied – maybe ultimately in front of the scenes too.

This may be where this new service Remix is coming from. According to Bloomberg, talks with the three majors and indie label repping Merlin about them getting on board with Music Key v2 are well underway, with Cohen’s former employer Warner Music reportedly already signed up.

Talks with Sony Music and Universal Music are ongoing, sources say. Though those talks may be further complicated because YouTube’s deal with Vevo – the Sony/Universal owned platform that manages official channels for the majors’ artists (and others) on YouTube – is also up for renewal. Although it has its own platform, Vevo is best know for its presence on YouTube, where it is able to sell its own advertising.

If YouTube increasingly pushes its users over to a new paid-for music set-up incorporating audio and video, that could take viewers away from Vevo and therefore Vevo’s advertisers. Which wouldn’t necessarily be an issue for Sony and Universal if YouTube Remix was a success and resulted in higher subscription-based royalties. But it could be an issue if YouTube wants the majors to take too big a risk on the as yet unproven new venture that could not only fail, but also screw up Vevo’s core business in the meantime.

Even if YouTube can get all the key labels on board – and then the music publishers and their collecting societies – and even if that did placate the Google site’s most vocal critics in the music community for now, it’s far from assured that YouTube would be able to persuade its albeit massive user-base to start paying for music within its platform. If YouTube’s subscription service failed to take off, the music industry is sure to return to full-on moaning about the value gap on the main ad-funded YouTube site.